Apple Inc. Fighting EU Battle Without Lobbyist Support

Apple Inc. (NASDAQ:AAPL) is in deep trouble as the European Commission is trying to recover more than €13 billion ($14.5 billion) in back taxes from it. However, the company doesn’t seem worried and is fighting against the EC’s call alone without any help from lobbyists or public relations campaigners, notes The Wall Street Journal.

No full-time lobbyists

Public filings state that in the year 2015, the iPhone maker spent less than €900,000 to lobby EU institutions and has just five people working part-time for it with no full-time lobbyists employed. Contrary to this, Google spent more than €4.25 million last year and had more than 10 people employed, notes the WSJ.

The European Commission, which is the EU’s antitrust regulator, is after several U.S. technology companies, including Alphabet, Amazon and Qualcomm. All are making attempts to convince the EU that their tax regimens or pricing policies do not breach any rules. Many have even built a European lobbying presence to try to sway investigations and potential legislation, such as rules covering copyrights and internet-based communications services.

In contrast, Apple lacks a presence in the EU capital. Citing people familiar with the matter, the WSJ reports that Apple tried to gather information from the commission about the evolving theory the EU was resting its case on but didn’t succeed in two years.

The EU intends to alter the behavior of the U.S. internet superpowers and has pushed forward a raft of regulations and investigations to do this. In order to clarify their positions directly with the EU’s antitrust chief Margrethe Vestager, some chief executives, including Apple’s Tim Cook and Google CEO Sundar Pichai, have even visited Brussels, according to the WSJ.

Apple is not at fault

Lisa de Simone of TechCrunch went through the European Commission’s original ruling, some prior rulings, the Treasury’s white paper about the European Commission’s actions and a lot of analysis in the tax community. She feels that the EC is over-reaching in its decision on Apple.

The European Commission’s argument is based on Apple receiving what it says is illegal state aid. Specifically, the EU has taken issue with two so-called “advanced pricing agreements” between Ireland’s tax authority and Apple over how the U.S. firm sets inter-company transfer prices among its subsidiaries which interact with its Irish operations.

de Simone argues that such agreements can be requested by anyone, and in 2014, there were more than 750 advanced pricing agreements in place among all EU member states.

Author: Aman JainAman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket.